Microsoft wary of Linux threat

Microsoft has named Linux vendors Canonical and Red Hat as desktop competitors for the first time in its 10-K filing to investors.

In years past Red Hat has only been named as a competitor to Microsoft’s server business, but it appears the software giant is feeling the pinch on all sides.

“[The] Client [division] faces strong competition from well-established companies with differing approaches to the PC market. Competing commercial software products, including variants of Unix, are supplied by competitors such as Apple, Canonical, and Red Hat,” writes Microsoft in its SEC filing.

“The Linux operating system, which is also derived from Unix and is available without payment under a General Public License, has gained some acceptance, especially in emerging markets, as competitive pressures lead OEMs to reduce costs and new, lower-price PC form-factors gain adoption.”

Canonical is the commercial sponsor of the Ubuntu Linux distro.

And it’s not only Microsoft’s client-side business that’s under siege according to the filing: “Competitors such as Apple, Google, Mozilla, and Opera Software Company offer software that competes with the Internet Explorer Web browsing capabilities of Windows products.”

Previously only Mozilla was considered worthy of being called out as serious competition in the browser market. However, with the advent of the browser ballot it appears Microsoft is predicting tougher times ahead for Internet Explorer.